Indicate by check mark whether the Issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
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State Issuer’s revenues for its most recent fiscal year: September 30, 2007 - $164,248.
State the aggregate market value of the voting and non-voting common stock held by non-affiliates computed by reference to the price at which the common stock was sold, or the average bid and asked price of such common stock, as of a specified date within the past 60 days.
December 27, 2007 - $1,573,442.52. There are approximately 6,051,702 shares of common voting stock of the Registrant beneficially owned by non-affiliates. There is a limited public market for the common stock of the Registrant, so this computation is based upon the bid price of $0.26 per share of the Registrant's common stock on the OTC Bulletin Board.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
None; not applicable.
Check whether the Issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer’s classes of common equity, as of the latest practicable date:
December 27, 2007: Common – 8,163,332
December 27, 2007: Preferred – 500,000
DOCUMENTS INCORPORATED BY REFERENCE
A description of “Documents Incorporated by Reference” is contained in Part III, Item 13 of this Report.
Transitional Small Business Issuer Format Yes [ ] No [X]
TABLE OF CONTENTS
Item 1. Description of Business
Item 2. Description of Property
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Management’s Discussion and Analysis or Plan of Operation
Report of Indepdendent Registered Public Accounting Firm
Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 27
Item 8(a)T. Controls and Procedures.
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Item 10. Executive Compensation
Item 11. Security Ownership of Certain Beneficial Owners and Management
Item 12. Certain Relationships and Related Transactions
Item 14. Principal Accounting Fees and Services
PART I
Item 1. Description of Business
Zaldiva, Inc., a Florida corporation (the "Company," "we" or "us"), is in the business of selling comic books, toys and collectible items at our retail location at 331 East Commercial Blvd., Ft. Lauderdale, Florida, and through our web sites, Zaldiva.com, Zaldivacomics.com. We also offer web design, hosting and IT services as well as our own brand of premium cigars and accessories. Since fiscal 2003, we have focused our operations increasingly on our online comic book and collectible retail operations, with less emphasis on cigar sales and web design and hosting. Following the grand opening of our new "brick-and-mortar" retail location in December, 2006, we expect that our operations will increasingly focus on the comic book and collectible end of business. In the future, we may also acquire other small companies offering similar products and services, although we do not have any current deals in negotiation.
We sell Zaldiva cigars and accessories through our e-commerce web site as well as through direct sales to establishments and individuals. We also receive some referral business. We advertise through trade shows and some periodicals, although the bulk of our advertising is done on the Internet. Our web site, www.zaldivacigars.com acts mainly as an online brochure, but we are also able to accept orders through the shopping cart on the site.
Our new retail location (located at 331 E Commercial Blvd, Ft. Lauderdale, FL 33334) officially opened for business on November 24, 2006.
Comic Books and Related Collectibles.
Comic books have been around at least as long as movies have. According to The Overstreet Comic Book Price Guide’s regular publication The Golden Age Quarterly, 1933 saw the publication of the first comic book in the size that would subsequently define the format. Credit for the first comic book ever created typically goes to Richard Fenton Outcalt's creation, "The Yellow Kid," in 1896. Outcalt essentially synthesized what had been made before him and introduced a new element, the balloon, a space where he wrote what the characters said, and that pointed to their mouth with a kind of tail.
From that point, the basis for a brand-new kind of art was set, and the adventure began. In the first decades of their life, comic books were primarily for children’s amusement, and this explains the name they carry today in the English language.
Presently, the comic book industry is still going strong more than 100 years after its birth. With advances like computer generated images (CGI), today's movie screens are filled with stories from comic books. In recent times, we have experienced such blockbuster movie hits as the "Batman" saga; "Spawn," which had its own animated series on HBO; "Spider-Man"; "X-Men" and "X-Men 2"; "The Hulk"; "The League of Extraordinary Gentlemen"; "DareDevil"; "Hellboy," "The Punisher" and "Electra". Many television shows have also sprung from the pages of comic books, most notably, "Smallville."
This unlimited market transcends all barriers, including age, race and gender, and also language, since most shows and movies are released in dubbed versions world-wide. Movies are released twice, first at the theater and then again in DVD and/or VHS format. The comic books themselves create a demand for collectible items; and the movies and televisions shows create even more of a demand. A popular comic book can, and often does, spawn hundreds of items to be collected and adored by its fans. We are engaged in the business of selling those items –
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everything from the comic book to the movie adaptation softcover book, and from the t-shirt to the prop replicas for the die-hard fans.
Traditional Marketing.
With the grand opening of our brick-and-mortar retail location in December, 2006, our operations began to take a more traditional marketing approach.
Brick-and-Mortar Store
The Company has taken out advertisements in local papers read by our target audience and we have also purchased radio spots on high-school and college radio stations. Flyers have been passed out as well as cooperatively placed in local businesses and restaurants. A costumed character was hired to wave to the traffic passing by in front of the store. More than 65,000 cars pass the location each day on their way to the highway entrance, so the sign on the building itself is a huge and effective form of advertisement.
Zaldiva.com
Advertisement for our web site is done through search engines, banner exchange programs and opt-in e-mail activities – all designed to drive traffic to our site. Weekly specials and featured items are regularly created to increase return traffic.
Zaldiva Web Solutions.
We currently provide hosting services for over 100 clients which produces a residual income through their hosting renewals and maintenance of these sites. We offer three different Web Site packages, an E-commerce package as well as any custom work needed for potential clients. Our IT services include, but are not limited to, the diagnosis, repair, maintainance, set-up and solution of software and hardware issues. We provide networking and wireless networking set-up and maintenance and eradicate viruses. Install computers, replace and add/remove hardware and software to existing networks and computers. Bringing companies up to speed on technologies, making them paperless and more.
In providing these types of services, Zaldiva Web Solutions can meet the Web and IT requirements of a small company to a large corporation.
Zaldiva Web Solutions completed construction of its new web site. We will aggressively market the web development industry through snail mail, on-line marketing within the top search engines and cross marketing. We offer interactive web tools for sale such as article and news manager, page publisher, listing manager, on-line mall directories and more.
We provide the following services:
Web Development -
* Internet & Intranet web site development & design
* E-commerce solutions, such as shopping carts
* Secure & password protected applications
* Graphic & artistic design & digital art
* Corporate identity logo creation
* Web standards & privacy consultation services
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* Web site reporting & visitor traffic analysis
* Web site hosting & maintenance
Media and Marketing -
* Audio/video streaming & media conversion
* Interactive virtual tours
* Interactive CD/DVD authoring for education and training
* Digital music production
* CD/DVD duplication services
* Branded & co-branded email services
* Internet strategy development
* Professional writing & content creation
* Web-based marketing & promotion campaigns
IT Solutions –
* Set-up, training and maintenance of 3rd party software
* IT consulting
* Networking and Wireless
* Computer systems set-up and configuration
* Virus eradication
Principal Products or Services and their Markets
Our principal products are the comic books, toys and collectibles that we sell from our newly-opened store in Ft. Lauderdale, Florida and through our web site (www.zaldiva.com). We also sell cigars and accessories, but this currently comprises less than ten percent of our business. Zaldiva has maintained an e-commerce web presence through Zaldiva.com since July of 1997. Experience and a very low overhead are Zaldiva's principal advantages in this area.
We also provide upscale web site development, design, programming and hosting, although this facet of our operations has also declined in importance in recent years. We have developed and maintain web sites for approximately 100 clients. Most of our clients are businesses. They are involved in many different industries and are widely dispersed geographically. We charge our clients on average $20 per month for hosting services, as well as design, updating and service fees. Zaldiva Web Solutions co-locates our servers with Rackspace, which allows us to offer 100% up time, guaranteed, with multiple connections for redundancy. It has approximately one megabyte of bandwidth, which is enough to support over 200 sites. We do not believe we will need to expand our bandwidth capability in the near future.
In our comic books business, we sell pop-culture comic book related collectibles, that primarily include action figures, dolls, statues, die-cast vehicles, T-shirts, books, magazines, posters and lithographs, household decor and decorative items, board and card games, caps and hats, licensed advertisements, plush toys, and some sports
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memorabilia.
The only services related to our comic book and related collectibles business provided by us are those services regarding newsletter subscriptions and/or free email accounts.
Distribution Methods of the Products or Services
All items sold in our comic book and related collectibles business are sold on our online stores at Zaldiva.com and ZaldivaComics.com and, since December, 2006, in our retail store in Ft. Lauderdale, Florida.
In November, 2003, we began accepting PayPal and eChecks from Authorize.net as payment for our products (in addition to traditional credit card payments). This has allowed us to make non-U.S. sales with ease, and these payment methods have proven beneficial to us.
Status of any Publicly Announced New Product or Service
Zaldiva does not currently have any new product/service that has been publicly announced.
Competitive Business Conditions and the Small Business Issuer’s Competitive Position in the Industry and Methods of Competition
The comic book and collectible retailing industry is no more or less competitive than any other business. Our competitors include other brick-and-mortar and online retailers of comics, toys and collectibles. Zaldiva.com Comics & Collectibles does however have several advantages in the current market.
No. 1: Location
Zaldiva.com Comics & Collectibles is located on the East side of the Greater Ft. Lauderdale area where there are few current competitors.
No. 2: Location/Heavy Traffic
Commercial Blvd. is a heavily traveled road which runs East and West through Ft. Lauderdale and the surrounding cities. There is no highway to take travelers East and West in this section of the city, so Commercial Blvd. is most often used. The store is located about one-half mile East of the extremely busy Commercial Blvd. entrances and exits to I95. This location puts at least 65,000 cars in front of the store each day. Zaldiva’s largest competitor is about eight miles West of the new store. Many people who live on the East side of Ft. Lauderdale and surrounding cities have had to travel through heavy traffic to this competitor for the past decade – simply because there was no choice. The new store makes it easy not only for those living on the East side to get their collectibles, but for people to the South (the Hollywood/Miami areas) and to the North (the Boca/Palm Beach areas) because of our proximity to the highway (I95).
No. 3: Knowledge and Attitude
We KNOW and love comics and collectibles. Other stores hire cheap labor to put behind the counter – and it shows. Zaldiva’s customers receive a warm and genuinely friendly greeting when they arrive. All of their questions are answered. We can find a common interest with anyone that walks in and run with it. We can recommend comics books based upon their interests. If they haven’t read a comic in years, we can get them up to speed. All of these things result in return customers. Many customers fly through our recommended books and return within days to get the next issue/volume or to get yet another recommendation.
No. 4: Our Online Store
No other local shops currently provide an online purchase/in-store pick up option. No other local shops even offer their full line of products both online and in-store – so we are unique in that area. The web-site is maintained by Zaldiva, so the overhead is next to nothing.
No. 5: Gift Certificates
We offer both on-line and in-store Gift Certificates. As simple as this sounds, none of our local competitors offer them. They were a big hit for Christmas and they cost no more than a little paper and ink. We had no
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outstanding gift certificates at September 30, 2007.
Sources and Availability of Raw Materials and Names of Principal Suppliers
Zaldiva does not use any raw materials in its operations.
Dependence on One or a Few Major Customers
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts, including Duration
We have obtained a trademark with the Florida Department of State for our logo, the word "Zaldiva" and a design of a crest in an oval shape with two birds, a star, leaves and a sunburst. Under Florida law, the knowing or willful forgery or counterfeiting of a Florida trademark constitutes the crime of counterfeiting, which may be a felony or a misdemeanor, depending on the circumstances. Our trademark will expire on November 27, 2011, but it may be renewed for a fee of $87.50. (This trademarked logo is used expressly for Zaliva Cigars). We have not applied for a registered trademark with the U.S. Patent and Trademark Office.
Need for any Governmental Approval of Principal Products or Services
None; not applicable. However, see the caption "Effect of Existing or Probable Governmental Regulations on Business," below.
Effect of Existing or Probable Governmental Regulations on the Business
Zaldiva is subject to general business laws, rules and regulations, as well as laws, rules and regulations relating to the Internet and e-commerce. These regulations may cover issues such as privacy, taxation, intellectual property, content, consumer protection and products liability. Compliance with these regulations may be expensive and time consuming and may impact our profitability in the future.
Sarbanes-Oxley Act.
On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"). The Sarbanes-Oxley Act imposes a wide variety of new regulatory requirements on publicly-held companies and their insiders. Many of these requirements will affect us. For example:
* Our chief executive officer and chief financial officer must now certify the accuracy of all of our periodic reports that contain financial statements;
* Our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures; and
* We may not make any loan to any director or executive officer and we may not materially modify any existing loans.
The Sarbanes-Oxley Act has required us to review our current procedures and policies to determine whether they comply with the Sarbanes-Oxley Act and the new regulations promulgated there under. We will continue to monitor our compliance with all future regulations that are adopted under the Sarbanes-Oxley Act and will take whatever actions are necessary to ensure that we are in compliance.
Research and Development Costs During the Last Two Fiscal Years
Zaldiva has not spent any money on research and development and we do not anticipate any need in the foreseeable future to spend resources on research and development.
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Cost and Effects of Compliance with Environmental Laws
Since the nature of its business is retail sales and marketing, Zaldiva does not believe that it will have any environmental compliance concerns.
Number of Total Employees and Number of Full Time Employees
As of September 30, 2007, Zaldiva had four full-time and no part-time employees. They are not part of any union, and we believe that our relationships with them are good.
Reports to Security Holders
You may read and copy any materials that we file with the Securities and Exchange Commission at the Securities and Exchange Commissions’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may also find all of the reports that we have filed electronically with the Securities and Exchange Commission at their Internet site www.sec.gov.
Item 2. Description of Property
In September, 2004, we purchased a property located at 331 East Commercial Boulevard in Fort Lauderdale, Florida. The property is situated in a high-traffic commercial residential area. We have renovated and expanded the property, which is now being used as a retail location for higher-end collectibles. We opened the property for business on November 14, 2006, and had our grand opening on December 16, 2006.
The property consists of approximately 1600 to 1700 square feet. We purchased the property for approximately $239,000 cash, using the proceeds from a private placement of preferred stock. The total cost of renovation was approximately $415,000.
Item 3. Legal Proceedings
Zaldiva is not a party to any pending legal proceeding. To the best of our knowledge, no federal, state or local governmental agency is presently contemplating any proceeding against us. No director, executive officer or affiliate of Zaldiva or owner of record or beneficially of more than five percent of our common stock is a party adverse to Zaldiva or has a material interest adverse to us in any proceeding.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of our stockholders during the fourth quarter of the fiscal year covered by this Annual Report.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.
Market Information
Our common stock is quoted on the OTC Bulletin Board of the Financial Industry Regulatory Authority ("FINRA") under the symbol "ZLDV", with quotations that commenced in April, 2003; however, the market for shares of our common stock is extremely limited. No assurance can be given that the present limited market for our common stock will continue or will be maintained, and the sale of the our common stock pursuant to Rule 144 of the Securities and Exchange Commission by our directors, executive officers or principal stockholders may have a substantial adverse impact on any such public market.
The high and low closing bid prices for shares of our common stock of for each quarter within the last two fiscal
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years, or the applicable period when there were quotations are as follows:
Period | High | Low |
October 1, 2005 through December 31, 2005 | $0.52 | $0.23 |
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January 1, 2006 through March 31, 2006 | $0.95 | $0.21 |
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April 1, 2006 through June 30, 2006 | $0.90 | $0.35 |
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July 1, 2006 through September 30, 2006 | $0.43 | $0.35 |
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October 1, 2006 through December 31, 2006 | $0.45 | $0.35 |
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January 1, 2007 through March 30, 2007 | $0.71 | $0.43 |
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April 1, 2007 through June 30, 2007 | $0.75 | $0.45 |
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July 1, 2007 through September 30, 2007 | $0.85 | $0.60 |
These bid prices were obtained from the National Quotation Bureau, LLC ("NQB") and do not necessarily reflect actual transactions, retail markups, mark downs or commissions.
No assurance can be given that any "established public market" will develop in the common stock of the Company, or if any such market does develop, that it will continue or be sustained for any period of time.
Holders
The number of record holders of the Company’s common stock as of the date of this Report is approximately 148, not including an indeterminate number who may hold shares in “street name.”
Dividends
Zaldiva has not declared any cash dividends with respect to its common stock, and does not intend to declare dividends in the foreseeable future. There are no material restrictions limiting, or that are likely to limit, our
ability to pay dividends on our securities.
Our Preferred Stock holders are entitled to receive dividends at a rate to 4% of the Liquidation Preference per share per annum, payable quarterly on January 1, April 1, July 1, and October 1. Any dividends that are not paid within three trading days following the date payable, shall continue to accrue and shall entail a late fee at the rate of 18% per annum. As of September 30, 2007, we had paid all dividends with common shares and with none in arrears.
Securities Authorized for Issuance under Equity Compensation Plans
Plan Category | Number of Securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (a) |
| (a) | (b) | (c) |
Equity compensation plans approved by security holders | -0- | -0- | -0- |
Equity compensation plans not approved by security holders | -0- | -0- | -0- |
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Total | -0- | -0- | -0- |
Recent Sales of Unregistered Securities
During the last three years we issued the following unregistered securities:
To whom | Date | Number of shares | Consideration* |
Four "accredited” investors | 1/04 | (1) | $152,500 |
Three "accredited” investors | 9/04 | (2) | $500,000 |
Nicole Leigh van Coller | 12/05 | 300,000 | Services valued at $96,000 |
The Human Cash Register | 6/06 | 305,000 | Warrant exercise |
Two ”accredited” investors | 7/06 | 42,858 | (3) |
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Christopher Ebersole
| 12/06 | 300,000 | Services valued at $126,000 and signing bonus |
Super Distributors | 2/07 | 305,000 | Warrant exercise |
Two “accredited” investors | 5/07 | 28,332 | (3) |
Two “accredited” consultants | 5/07 | (4) | (4) |
Super Distributors | 7/07 | 357,142 | Conversion of Preferred Stock |
Three investors | 8/07 | 305,000 | Warrant exercise |
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(1) We sold 1,220,000 Units at a price of $0.125 per Unit. Each Unit consisted of one "unregistered" and "restricted" share of common stock and one warrant to purchase an additional "unregistered" and "restricted" share of common stock for $0.25, exercisable for five years.
(2) We sold 500,000 "unregistered" and "restricted" shares of our Series A 4% Convertible Preferred Stock (the "Preferred Stock"). On September 17, 2004, we filed with the Securities and Exchange Commission a Current Report on Form 8-K disclosing the rights and preferences of the Preferred Stock.
(3) We issued these shares of "unregistered" and "restricted" shares of our common stock as payment for the quarterly dividends of our Series A Preferred Stock.
(4) We issued warrants to purchase a total of 1,300,000 “unregistered” and “restricted” shares of our common stock to two consultants, in consideration of services rendered. Each warrant is exercisable at a price of $0.25 per share, and expires in June, 2012.
We believe that the offer and sale of these securities was exempt from the registration requirements of the Securities Act, pursuant to Sections 4(2) and 4(6) thereof, and Regulation D of the Securities and Exchange Commission.
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Use of Proceeds of Registered Securities
Zaldiva had no proceeds from the sale of registered securities during the periods covered by this Annual Report or the fiscal periods reported in its consolidated financial statements that accompany this Annual Report.
Purchases of Equity Securities by Us and Affiliated Purchasers
SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES
Period | (a) Total Number of Shares (or Units) Purchased | (b) Average Price Paid per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may yet be Purchased Under the Plans or Programs |
Month #1 July 1, 2007 through July 31, 2007 | -0- | -0- | -0- | -0- |
Month #2 August 1, 2007 through August 31, 2007 | -0- | -0- | -0- | -0- |
Month #3 September 1, 2007 through September 30, 2007 | -0- | -0- | -0- | -0- |
Total | -0- | -0- | -0- | -0- |
Item 6. Management’s Discussion and Analysis or Plan of Operation
Management’s Discussion and Analysis of Financial Condition and Results of Operations
For the years ended September 30, 2007 and 2006, we had revenues of $164,248, and $77,649, respectively. This increase in revenues was due principally to the opening of our Ft. Lauderdale retail location in November, 2006. During the period ended September 30, 2007, approximately 85% of our revenues were derived from retail sales of comics and collectibles and cigars and accessories, with the remaining 15% coming from our internet services. In the fiscal year ended September 30, 2006, these percentages were 72.8% and 27.2%, respectively.
Cost of goods sold increased to $82,845 in the fiscal year ended September 30, 2007, from $34,412 in the prior fiscal year. As a percentage of product sales, cost of goods sold was virtually unchanged, representing in 59.4% of product sales in 2007, and 60.9% of product sales in 2006.
Our operating expenses increased to $442,612 in fiscal 2007, from $244,992, in fiscal 2006. Net loss totaled $389,314 for the year ended September 30, 2007, and net loss totaled $226,943 for the year ended September 30, 2006.
Liquidity
Zaldiva had cash and cash equivalents of $77,769 as of September 30, 2007, and total current assets of $167,742; total current liabilities of $608,134; and a total stockholders’ equity of $228,514.
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Off-Balance Sheet Arrangements
Zaldiva had no off-balance sheet arrangements during any of the period covered by this Annual Report or the consolidated financial statements that accompany this Annual Report.
Forward-looking Statements
Statements made in this Annual Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business of our Company, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may”, “would”, “could”, “should”, “expects”, “projects”, “anticipates”, “believes”, “estimates”, “plans”, “intends”, “targets” or similar expressions.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our Company’s control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which our Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our Company’s operations, products, services and prices.
Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. Our Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.
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Item 7. Financial Statements.
ZALDIVA, INC.
FINANCIAL STATEMENTS
September 30, 2007
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Report of Indepdendent Registered Public Accounting Firm
Board of Directors and Stockholders
Zaldiva, Inc.
Ft. Lauderdale, Florida
We have audited the accompanying balance sheet of Zaldiva, Inc. as of September 30, 2007, and the related statements of operations, stockholders' equity, and cash flows for the years ended September 30, 2007 and 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Zaldiva, Inc. as of September 30, 2007, and the results of operations and cash flows for the years ended September 30, 2007 and 2006, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that Zaldiva, Inc. will continue as a going concern. As discussed in Note F to the financial statements, the Company has experienced recurring losses. These issues raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note F. The financial statements do not include any adjustment that might result from
the outcome of this uncertainty.
Mantyla, McReynolds, LLC
December 28, 2007
Salt Lake City, Utah
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ZALDIVA, INC. | ||||||||
Statements of Operations | ||||||||
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| For the Years Ended | |||||
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| September 30, | |||||
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| 2007 |
| 2006 | |||
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REVENUES |
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| Product Sales | $ | 139,446 |
| $ | 56,537 | ||
| Internet services |
| 24,802 |
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| 21,112 | ||
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| Total Revenues |
| 164,248 |
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| 77,649 | |
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COST OF GOODS SOLD |
| 82,845 |
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| 34,412 | |||
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| Gross Profit |
| 81,403 |
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| 43,237 | |
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OPERATING EXPENSES |
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| General and administrative expenses |
| 121,424 |
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| 66,670 | ||
| Consulting and professional fees |
| 298,340 |
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| 158,087 | ||
| Advertising expense |
| 22,848 |
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| 20,235 | ||
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| Total Operating Expenses |
| 442,612 |
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| 244,992 | |
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| OPERATING LOSS |
| (361,209) |
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| (201,755) | |
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OTHER INCOME (EXPENSE) |
|
|
|
|
| |||
|
|
|
|
|
|
|
| |
| Interest income |
| 895 |
|
| 6,812 | ||
| Interest expense |
| (29,000) |
|
| (32,000) | ||
|
|
|
|
|
|
|
| |
|
| Total Other Income (Expense) |
| (28,105) |
|
| (25,188) | |
|
|
|
|
|
|
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| |
NET LOSS BEFORE INCOME TAXES | $ | (389,314) |
| $ | (226,943) | |||
Provision for income taxes |
| - |
|
| - | |||
NET LOSS | $ | (389,314) |
| $ | (226,943) | |||
|
|
|
|
|
|
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| |
| BASIC AND DILUTED |
|
|
|
|
| ||
| LOSS PER SHARE | $ | (0.05) |
| $ | (0.03) | ||
|
|
|
|
|
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| |
| WEIGTHED AVERAGE NUMBER OF SHARES |
|
|
|
|
| ||
| OUTSTANDING – BASIC AND DILUTED |
| 7,422,159 |
|
| 6,546,442 | ||
|
|
|
|
|
|
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| |
The accompanying notes are an integral part of these financial statements. | ||||||||
16
ZALDIVA, INC. | |||||||||||||
Statements of Stockholders' Equity (Deficit) | |||||||||||||
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| Additional |
|
|
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| Total | ||
| Common Stock |
| Paid-In |
| Accumulated |
| Stockholders' | ||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Equity | ||||
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|
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|
|
|
|
|
|
|
Balance, September 30, 2005 | 6,220,000 |
| $ | 6,220 |
| $ | 245,280 |
| $ | (410,869) |
| $ | (159,369) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional capital for inventory | - |
|
| - |
|
| 12,000 |
|
| - |
|
| 12,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issuance | 647,858 |
|
| 648 |
|
| 186,604 |
|
| - |
|
| 187,252 |
|
|
|
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|
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|
|
Net loss for the year |
|
|
|
|
|
|
|
|
|
|
|
|
|
ended September 30, 2006 | - |
|
| - |
|
| - |
|
| (226,943) |
|
| (226,943) |
| |||||||||||||