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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Pazoo Inc (CE) | USOTC:PZOO | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.000001 | 0.00 | 01:00:00 |
Nevada
|
27-3984713
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
|
760 State Route 10, Suite 203
Whippany, NJ
|
07981
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
|
Non-accelerated filer
|
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
x
|
Page
|
|||
PAZ
OO
, INC.
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
(Unaudited)
|
||||||||
June 30,
|
December 31,
|
|||||||
2015 | 2014 | |||||||
(Restated) | ||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 152,642 | $ | 733,637 | ||||
Accounts receivable
|
89,370 | 87,949 | ||||||
Accounts receivable - related party
|
2,998 | - | ||||||
Stock subscription receivable
|
12,999 | 18,253 | ||||||
Inventories
|
2,668 | 2,668 | ||||||
Prepaid expenses
|
10,247 | 6,181 | ||||||
Total current assets
|
270,924 | 848,688 | ||||||
Fixed assets, net
|
381,671 | - | ||||||
Goodwill | 1,128,442 | - | ||||||
Intangible assets, net
|
518,724 | - | ||||||
Total other assets
|
2,028,837 | - | ||||||
Total assets
|
$ | 2,299,761 | $ | 848,688 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$ | 119,085 | $ | 84,189 | ||||
Loans payable
|
3,000 | 3,000 | ||||||
Interest payable
|
166,855 | 46,862 | ||||||
Convertible debt, net of unamortized discounts of $284,366 and $413,898
|
1,152,240 | 895,664 | ||||||
Contingent consideration liabilites
|
1,228,581 | - | ||||||
Derivative liabilities
|
1,542,994 | 2,576,025 | ||||||
Total current liabilities
|
2,984,174 | 3,605,740 | ||||||
Long-term liabilities:
|
||||||||
Long-term portion of convertible debt, net of unamortized discounts of $838,596 and $783,668
|
98,348 | 28,832 | ||||||
Total long-term liabilities
|
98,348 | 28,832 | ||||||
Total liabilities
|
4,311,103 | 3,634,572 | ||||||
Stockholders' deficit
|
||||||||
Common stock, $0.001 par value; 980,000,000 shares authorized, 667,848,681 and 193,030,398 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively
|
667,848 | 193,031 | ||||||
Convertible preferred stock, Ser. A, $0.001 par value, 10,000,000 shares authorized, 2,463,526 and 1,203,526 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively.
|
2,463 | 1,204 | ||||||
Preferred stock, Ser. B, $0.001 par value, 2,500,000 shares authorized, 1,637,500 and 1,187,500 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively.
|
1,637 | 1,187 | ||||||
Preferred stock, Ser. C, $0.001 par value, 7,500,000 shares authorized, 1,080,000 and 0 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively.
|
1,080 | - | ||||||
Additional paid-in capital
|
8,957,353 | 4,438,643 | ||||||
Accumulated deficit
|
(11,641,723 | ) | (7,419,949 | ) | ||||
Total stockholders' deficit
|
(2,011,343 | ) | (2,785,884 | ) | ||||
Total liabilities and stockholders' deficit
|
$ | 2,299,761 | $ | 848,688 |
PAZOO, INC.
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
(Restated)
|
(Restated)
|
|||||||||||||||
Revenues:
|
||||||||||||||||
Advertising sales
|
$
|
1,399
|
$
|
34,058
|
$
|
21,632
|
$
|
51,167
|
||||||||
Merchandise sales
|
-
|
35
|
-
|
252
|
||||||||||||
Total revenues
|
1,399
|
34,093
|
21,632
|
51,419
|
||||||||||||
Cost of goods sold
|
||||||||||||||||
Merchandise sales
|
-
|
244
|
-
|
569
|
||||||||||||
Total cost of goods sold
|
-
|
244
|
-
|
569
|
||||||||||||
Gross profit
|
1,399
|
33,849
|
21,632
|
50,850
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Selling, general and administrative expenses
|
401,921
|
320,808
|
1,482,783
|
605,039
|
||||||||||||
Professional fees
|
299,035
|
136,701
|
527,556
|
172,134
|
||||||||||||
Website setup
|
49,271
|
34,702
|
106,391
|
57,110
|
||||||||||||
Total operating expenses
|
750,227
|
492,211
|
2,116,730
|
834,283
|
||||||||||||
Loss from operations
|
(748,828
|
)
|
(458,362
|
)
|
(2,095,098
|
)
|
(783,433
|
)
|
||||||||
Other expenses:
|
||||||||||||||||
Gain/(Loss) on derivative liabilities
|
(433,082
|
)
|
(38,887
|
)
|
6,031
|
(337,300
|
)
|
|||||||||
Impairment loss on equity method investments
|
(281,209
|
)
|
-
|
(780,209
|
) |
-
|
||||||||||
Interest expense
|
(834,127
|
)
|
(6,000
|
)
|
(1,352,498
|
)
|
(12,000
|
)
|
||||||||
Net loss
|
$
|
(2,297,246
|
)
|
$
|
(503,249
|
)
|
$
|
(4,221,774
|
)
|
$
|
(1,132,733
|
)
|
||||
Series A preferred stock dividends
|
(24,177
|
)
|
(5,133
|
)
|
(33,139
|
)
|
(10,209
|
)
|
||||||||
Net loss attributable to common stockholders
|
$
|
(2,321,423
|
)
|
$
|
(508,382
|
)
|
$
|
(4,254,913
|
)
|
$
|
(1,142,942
|
)
|
||||
Net loss per common share – basic and diluted
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
||||
Weighted average common shares outstanding - basic and diluted
|
611,091,133
|
111,809,486
|
451,212,156
|
108,865,363
|
PAZOO, INC.
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(Unaudited)
|
||||||||
Six Months Ended
|
||||||||
June 30,
|
||||||||
2015
|
2014
|
|||||||
(Restated)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(4,221,774
|
)
|
$
|
(1,132,733
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Amortization of debt discounts
|
1,111,453
|
83,526
|
||||||
Goodwill impairment
|
-
|
-
|
||||||
Depreciation
|
6,469
|
-
|
||||||
Amortization
|
6,105
|
-
|
||||||
Gain on change in fair value of contingent consideration
|
-
|
-
|
||||||
Stock-based compensation
|
833,807
|
346,268
|
||||||
(Gain)/loss on derivative liabilities
|
(6,031
|
)
|
337,300
|
|||||
Loss on true-up of convertible notes
|
44,383
|
-
|
||||||
Additional common shares issued for true-up of convertible notes
|
93,087
|
-
|
||||||
Impairment loss on equity method investment
|
780,209
|
-
|
||||||
Change in fair value of equity method investment
|
-
|
-
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(1,421
|
)
|
(19,240
|
)
|
||||
Accounts receivable - related party
|
70
|
|||||||
Stock subscription receivable
|
5,254
|
-
|
||||||
Inventory
|
-
|
1,323
|
||||||
Prepaid expenses and other current assets
|
9,985
|
121
|
||||||
Accounts payable and accrued liabilities
|
34,895
|
18,933
|
||||||
Interest payable
|
236,188
|
-
|
||||||
Net cash used in operating activities
|
(1,067,321
|
)
|
(364,502
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Deposit made on acquisition of investment
|
-
|
(198,000
|
)
|
|||||
Cash paid for intangible asset
|
(307,500
|
)
|
-
|
|||||
Cash received in acquisition of MA & Associates
|
1,798
|
-
|
||||||
Investment in equity method investee
|
(778,639
|
)
|
-
|
|||||
Net cash used in investing activities
|
(1,084,341
|
)
|
(198,000
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Borrowings on convertible note, net of original issue discounts
|
1,250,287
|
344,725
|
||||||
Repayments on convertible notes
|
(350,000
|
)
|
-
|
|||||
Capital contributions from management
|
42,000
|
|||||||
Proceeds from issuing common stock
|
48,380
|
-
|
||||||
Proceeds from exercise of Series A preferred warrants
|
-
|
40,000
|
||||||
Proceeds from sale of Series A preferred stock and warrants
|
580,000
|
270,270
|
||||||
Net cash provided by financing activities
|
1,570,667
|
654,995
|
||||||
Net increase (decrease) in cash and cash equivalents
|
(580,995
|
)
|
92,493
|
|||||
Cash and cash equivalents beginning of period
|
733,637
|
35,848
|
||||||
Cash and cash equivalents end of period
|
$
|
152,642
|
$
|
128,341
|
||||
Supplemental Disclosure of Cash Flows Information
|
||||||||
Cash paid for interest
|
$
|
-
|
$
|
-
|
||||
Cash paid for income taxes
|
-
|
-
|
||||||
Noncash Investing and Financing Activities
|
||||||||
Preferred shares issued for acquisition of MA & Associates
|
$
|
500,000
|
$
|
-
|
||||
Contingent consideration for acquisition of MA & Associates
|
1,228,581
|
-
|
||||||
Common stock issued for the conversion of Series A preferred stock
|
111,500
|
1,700
|
||||||
Debt discount due to derivative liabilities
|
855,101
|
319,581
|
||||||
Payments of accounts payable by third party
|
-
|
2,075
|
||||||
Original issue discount on convertible note
|
-
|
15,500
|
||||||
Resolution of derivative liabilities
|
1,882,101
|
-
|
||||||
Convertible debt issued for accrued rent expense
|
14,051
|
16,601
|
||||||
Common shares issued for conversion of debt and interest
|
1,016,943
|
-
|
6,158,333
|
shares for third-party services valued at $51,194
|
||
5,460,125
|
shares issued for cash for cash proceeds of $48,380
|
||
12,165,163
|
shares issued for true-up of loan conversion valued and expensed at $93,087
|
||
111,500,000
|
shares resulting from Series A Preferred Stock holders converting 1,115,000 shares
|
||
339,534,662
|
shares resulting from debt holders converting $952,305 of debt into common stock
|
||
474,818,283
|
shares issued total
|
||
193,030,398
|
shares at December 31, 2014
|
||
667,848,681
|
shares at June 30, 2015
|
(1,115,000
|
)
|
shares converted into 111,500,000 common shares
|
|
2,375,000
|
shares issued for $580,000 in cash
|
||
1,260,000
|
shares total
|
||
1,203,526
|
shares at December 31, 2014
|
||
2,463,526
|
shares at June 30, 2015
|
Warrants
|
Weighted Average Exercise Price
|
|||||||
Outstanding - December 31, 2014
|
1,030,226
|
$
|
2.23
|
|||||
Granted
|
2,325,000
|
0.50
|
||||||
Forfeited/Canceled
|
(50,000)
|
0.05
|
||||||
Exercised
|
-
|
-
|
||||||
Outstanding - June 30, 2015
|
3,305,226
|
0.96
|
||||||
Exercisable - June 30, 2015
|
3,305,226
|
$
|
0.96
|
Warrants
|
Weighted Average Exercise Price
|
|||||||
Outstanding - December 31, 2014
|
6,130,470
|
$
|
0.05
|
|||||
Granted
|
-
|
-
|
||||||
Forfeited/Canceled
|
(5,000,000
|
)
|
0.05
|
|||||
Exercised
|
-
|
-
|
||||||
Outstanding - June 30, 2015
|
1,130,470
|
0.01
|
||||||
Exercisable - June 30, 2015
|
1,130,470
|
$
|
0.01
|
ACQUIRED ASSETS:
|
||||
Current assets
|
$ | 4,866 | ||
In-process research & development
|
117,329 | |||
Licensing
|
100,000 | |||
Other assets
|
327,796 | |||
Total assets acquired
|
$ | 549,991 | ||
LIABILITIES ASSUMED:
|
||||
Current liabilities
|
$ | (11,756 | ) | |
Other liabilities
|
(10 | ) | ||
Total liabilities assumed
|
$ | (11,766 | ) | |
Net assets acquired
|
$ | 538,225 |
Unaudited Pro Forma Results of Operations
|
||||||||||||||||
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
(Restated)
|
(Restated)
|
|||||||||||||||
Revenues
|
$ | 1,399 | $ | 34,093 | $ | 21,632 | $ | 51,419 | ||||||||
Loss from operations
|
(748,828 | ) | (458,632 | ) | (2,095,098 | ) | (783,433 | ) | ||||||||
Net income (loss)
|
$ | (3,430,804 | ) | $ | (503,249 | ) | $ | (5,355,332 | ) | $ | (1,132,733 | ) |
Short Term
|
Long Term
|
Total
|
|||||||||||
Balance as of December 31, 2014 - Net
|
$ | 911,899 | $ | 15,607 | $ | 927,496 | |||||||
Add back: unamortized discount
|
(500,673 | ) | (696,893 | ) | (1,197,566 | ) | |||||||
Balance as of December 31, 2014 - Gross
|
$ | 1,412,562 | $ | 712,500 | $ | 2,125,062 | |||||||
Cash additions
|
970,287 | 280,000 | 1,250,287 | ||||||||||
Non-cash additions
|
179,302 | - | 179,302 |
(a
)
|
|||||||||
Cash payments
|
(350,000 | ) | - | (350,000 | ) | ||||||||
Conversions
|
(833,425 | ) | (55,556 | ) | (888,981 | ) |
(b)
|
||||||
Original issue discount
|
57,880 | - | 57,880 | ||||||||||
Total
|
1,436,606 | 936,944 | 2,373,550 | ||||||||||
Less: unamortized discount
|
(284,366 | ) | (838,596 | ) | (1,122,962 | ) | |||||||
Balance as of June 30, 2015
|
$ | 1,152,240 | $ | 98,348 | $ | 1,250,588 |
June 30, 2015
|
||||
Dividend yield:
|
0
|
|||
Expected volatility
|
161.0% to 214.0%
|
|||
Risk free interest rate
|
0.02% to 1.63%
|
|||
Expected life (years)
|
0.16 to 4.89
|
Balance as of December 31, 2014
|
$
|
2,576,025
|
||
Debt discount
|
855,101
|
|||
Original issuance discount
|
-
|
|||
Extinguished
|
(1,882,101
|
)
|
||
Change in fair value
|
(6,031
|
)
|
||
Ending balance as of June 30, 2015
|
$
|
1,542,944
|
Recurring Fair Value Measurements
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
LIABILITIES:
|
||||||||||||||||
Derivative liabilities – June 30, 2015
|
-
|
-
|
1,542,994
|
1,542,994
|
||||||||||||
Derivative liabilities – December 31, 2014
|
-
|
-
|
2,576,025
|
2,576,025
|
|
●
|
Investors converted $97,405 of Convertible Promissory Notes into 36,208,656 common shares.
|
|
●
|
Investors converted 200,000 Convertible Preferred Series A Stock into 20,000,000 shares of common stock.
|
|
●
|
The Company borrowed one Convertible Note of $125,000 under convertible notes with the following terms: 8.0% interest, maturity date of 4/14/16, and a conversion price calculated at 50% discount to the lowest trading price of the previous 15 days.
|
|
●
|
The Company took an investment of $125,000 in exchange for Convertible Series C Stock which converts to 12,500,000 common shares. The Company has not yet issued any shares as a result of this agreement and no cash has been received.
|
|
●
|
On July 24, 2015, the Company entered into a revolving loan agreement whereby the Company will act as Lender to Harris Lee Colorado, LLC. The maximum principal of the loan is $2,500,000, of which $0 is outstanding as of this date. The maturity date for the loan is January 24, 2023 and has an interest rate of the higher of 1.77% per annum or LIBOR + 50 bps, but not to exceed 4.0% per annum.
|
|
●
|
The Company issued a total of 4,500,000 warrant exercise shares less 166,387 exercise shares in cashless exercise.
|
|
●
|
Advertising Revenue from Our Website,
www.pazoo.com
.
Through advertising providers and agencies, pazoo.com is paid for every ad impression that appears on a page for which a visitor goes to. As we build our visitor base, ad revenue will increase. However, just having the traffic does not effectively increase advertising revenue. To get the full value of each visitor, the time on site must be long enough so that a visitor is interested in going to multiple pages for which there are ads on each page. The only way this will transpire is if the visitor’s experience is gratifying. This is why pazoo.com is so focused on quality content that’s interesting and informative. A bad visitor experience will result in a low time on site and fewer page views. Internet tracking tools have much improved over the past decade and will continue to improve in the coming years, especially when it comes to advertising and overall website analytics. Pazoo continues to constantly improve is this area at all times.
Pazoo.com has a unique and compelling online marketing platform. Pazoo.com offers the following important marketing advantages to its target audiences:
|
|
1.
|
A comprehensive solution as a content source – information on a full spectrum of disciplines within the health and wellness marketplace;
|
|
2.
|
Health and wellness experts that have expertise in these varied disciplines and write about their areas expertise; and
|
|
3.
|
Content that is both for the health and wellness of people as well as their pets (over 60% of American homes have pets).
|
|
●
|
E-commerce.
Our e-commerce offerings will increase as we build the traffic coming to pazoo.com. In this way we could establish a revenue source over and above advertising to increase the value of each visitor. We have the following e-commerce elements ready for an activated marketing program:
|
|
1.
|
An e-commerce platform that is functional;
|
|
2.
|
Relationships with manufacturers, distributors and other e-commerce companies so that increasing product offerings will not be time consuming;
|
|
3.
|
Members on the pazoo.com content team with merchandising experience: i.e. a Pazoo expert is buyer of pet products for a large pet retailer; and
|
|
4.
|
Members on the pazoo.com content team that are experienced in e-commerce marketing; i.e. we will look to offer our consumers low cost and timely delivery of product by negotiating with shipping companies to offer a flat rates on various products.
|
|
●
|
Pharmaceutical Testing Facilities.
We entered this arena
through our April 2014 acquisition of a 40% minority equity stake in MA & Associates, LLC. MA & Associates was launched in September of 2013 to provide quality control services to the medical cannabis industry. MA & Associates’ primary mission is to protect the public health by providing infrastructure and analytical services to legally authorized distributors and producers of cannabis and to regulators tracking their operations. As of June, 2015, we have acquired a 100% equity state in MA & Associates, LLC and the testing laboratory in Las Vegas Nevada is open for business.
The company will provide the medical cannabis industry guidelines on how the regulation and inspection by public health authorities is to be implemented. MA & Associates’ primary customer base includes all of the licensed cannabis cultivators, in the State of Nevada, and their customers are required by law to have their products tested before they can be transferred to the dispensaries.
We have further expanded our footprint in this arena through our acquisition of 100% stake in Harris Lee Holdings, LLC, a company formed to take the MA & Associates testing model outside of Nevada and into other states. The company is currently in the process of partnering with Harris Lee Colorado, LLC to take over an existing lab in Denver, Colorado, and just announced it has leased a space in Portland, Oregon where it will be establishing a testing lab. We are in a unique position to provide the mandated health and safety testing upon which this burgeoning industry must hinge moving forward.
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Exhibit
Number
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Description
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March 30, 2016
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PAZOO, INC.
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/s/ David M. Cunic
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David M. Cunic
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Chief Executive Officer
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March 30, 2016
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PAZOO, INC.
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/s/ Ben Hoehn
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Ben Hoehn,
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||
Chief Operating Officer, Acting Chief Financial Officer (Principal Financial and Accounting Officer)
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1 Year Pazoo (CE) Chart |
1 Month Pazoo (CE) Chart |
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